Dossier D.C.: The Money Pit

Despite campaign-finance scandals, it's still politics as usual Mad magazine's Alfred E. Neuman said it best: "What me worry?" His stoic sentiment neatly expresses the state of affairs in Washington. Given the status of campaign-finance reform these days, you'd never know that President Bill Clinton was in trouble for the Democratic Party's use of soft money in 1996 to create a second campaign (the "issue" campaign) to get himself re-elected. That spurious tactic--utilizing a legal loophole in federal election law to spend money for elections while calling it generic issue advertising--is now considered standard operating procedure. It is the paradigm for all future media expenditures. Despite congressional hearings on the campaign-finance scandal and a repeated pounding in the press, it's politics as usual on Capitol Hill--and across the country. Now, many candidates, Republicans and Democrats alike, are following Clinton's lead: They are running two campaigns--the first legitimately earmarked for an election, the second financed with soft money. The latter, traditionally used to promote issues, is now promoting candidates. By subverting the law, politicians are using more soft money for their advertising, claim several media consultants. "The old model was boxing," says one prominent Republican media consultant who worked on a recent presidential campaign. "Now it's football--with a lot of players on each side. The president set such a high standard in these matters," he adds dryly, "that we are all following the Clinton model." What's the difference between soft money and hard money? It's important to remember that soft money is primarily gifts to a political party from a corporation. Corporate giving was outlawed in 1907 because it was generally felt that corporations were running the political show. Money doesn't talk; it screams. It also excludes. The public simply couldn't afford a seat at the table. All that changed in 1978 when the Federal Election Commission ruled that corporations could give to political parties--with a proviso. The money could not expressly benefit a particular candidate. Instead, the money could be used to sustain political parties, paying for such things as rent, postage and voter drives. Hard money, on the other hand, is federally regulated individual contributions that are capped at $1,000. The best way to get around that limit has been to line up hundreds of interested parties who are each willing to contribute that amount. Is it any wonder that soft money is catnip to politicians? Say hello to campaign plugs thinly veiled as issue ads. It wasn't long before the FEC ruling was exploited to the point where excessive spending became the rule, not the exception. In fact, there is no distinction between hard and soft money anymore. The so-called restrictions, critics say, are worthless. "Yes, it's illegal," says Matt Keller, a lobbyist for Common Cause. "Our argument is that these are express advocacy ads." Common Cause first alerted the public to the excesses of Clinton's race last year, neatly lighting a fire under Congress and the Department of Justice. "What we need is the U.S. Supreme Court to tell candidates what they're doing is not right," Keller suggests. "Clinton was able to spend twice as much because he used soft money from the Democratic National Committee coffers for ads that were meant to benefit his party--not him directly. But it's clear now that it did." And the fallout is pronounced. It should come as no big surprise that the Republican National Committee, in a battle to keep the House seat that Rep. Susan Molinari, R-N.Y., vacated to become a TV journalist, has spent $1 million on issue ads that avoid mentioning Republican candidate Vito Fossella but attack Democrat Eric Vitaliano by name. The Staten Island, N.Y.-based candidates were in a dead heat just days before the election. RNC officials defended the negative ad, calling it issue-based. It focused on the tax burden a Democratic candidate would place on working Americans. For their part, DNC officials interpreted the ad as an affront, accusing the GOP of trying to buy Molinari's seat. The DNC, meanwhile, is getting seriously involved in the New Jersey gubernatorial election--to the tune of $250,000--in hopes of helping James McGreevey defeat Gov. Christine Todd Whitman. The DNC threw its campaign coffers behind McGreevey after the state's Election Law Enforcement Commission decided that issue ads run by the RNC were legal. Many consultants--who did not want to comment on the record--say they do worry about the legality of soft-money spending. So far, however, they have chosen to follow campaign orders. That is, they are following in the tradition of Clinton's campaign gurus, who hold fast to the tenet: Two is better than one. "Clinton used the loophole, and he won," says another consultant. "That's still what many candidates are focused on, not the potential breach in ethics." And the candidates are taking their political-correctness cue from the people, whose mercury isn't rising. Only those hopelessly addicted to C-Span have even watched the hearings. The news coverage, despite raising interesting points, has focused on the smaller, more tangible details, such as where Clinton made his campaign phone calls. Jay Leno echoed many people's sentiments when he said on the air, "What was he [the President] supposed to do, go down to the 7-Eleven?" "The telephone calls were a tempest in a teapot," admits Keller. "What we're talking about here is massive violations of federal law." It's not yet known whether Attorney General Janet Reno will hire a special prosecutor to look into this imbroglio. The campaign-finance bill proposed by Sen. John McCain, R-Ariz., failed in the Senate, but watchdog groups such as Common Cause still hope to push for stronger measures. Late last week, Sen. Orrin Hatch, R-Utah, said he wanted to pass some legislation before the end of this session, which is soon. The Wall Street Journal reported that Senate Majority Leader Trent Lott pledged to schedule debate on campaign-finance reform by March 6. While Lott retains control over which bill is called up first, a vote may soon follow on the bipartisan plan sponsored by McCain and Russell Feingold, D-Wis. Effective Senate action could turn public indifference into a political hot potato. To date, there has been no negative effect on politicians who use soft money. Instead, campaigns are getting far more creative in their advertising--as well as their accounting. "Washington thinks people don't care, that it's all a joke," says Keller. "If you believe that, our system is doomed. The way things work, if you have money, you have a say. The people in power have no reason to try and change that."

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Dossier D.C.: The Money Pit

Nora Fitzgerald

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Nora Fitzgerald